When the March 2009 international trade numbers were released a year ago, national exports had declined by 21.7 percent compared to March 2008 and all but three states registered declines in shipments abroad, ranging from a small decline of -1.2 percent in Connecticut to a large drop of -63.8 percent in New Mexico. The three states that recorded an increase in exports last year were Mississippi, Nevada and Oklahoma.
This year, the numbers are a lot better for foreign sales of goods for exporting companies, which ultimately have contributed to more overall sales, higher production activity, an improvement in company profits and, most important, more jobs.
In comparison to March 2009, national exports of goods in March 2010 jumped 20.3 percent. In all but three states export growth in March 2010 was positive, ranging from a high of 66.2 percent in Utah to a low of 2.0 percent in Massachusetts. The three states which this year recorded a decline in foreign sales were Colorado, Nevada and North Dakota.
In the latest snapshot of trade numbers for the Wolverine State, exports of goods stayed nearly flat, edging down 0.4 percent in March to $3,903.8 million, from $3,918.1 million in February, adjusted for seasonal variation, a statistical process that smoothes out monthly fluctuations for factors such as the number of days in a month and holidays, thus illuminating the monthly trend in the indicator.
On an annual basis, Michigan’s exporters posted significant gains in marketing their goods abroad. In March of this year, foreign outbound shipments from state companies surpassed their level during March of 2009 by $1,514.9 million, or 63.4 percent.
Exports of manufactured goods dominated the state’s international trade, accounting for 85 percent of all exports. In March, shipments abroad from Michigan’s factories decreased 3.4 percent to a seasonally adjusted volume of $3,331.9 million from February. In comparison with last year, March’s state exports of manufactured goods were 61.4 percent higher than in March 2009.
Exports of non-manufactured goods went up 21.6 percent in March to $572.0 million, adjusted for seasonal variation. This group of shipments abroad consists of agricultural goods, mining products and re-exports, which are foreign goods that entered the state as imports and are exported in substantially the same condition as when imported.
For the country as a whole, U.S. exports of goods, seasonally adjusted, rose by 4.3 percent in March to $102.7 billion from the previous month. Consequently, in the first quarter of 2010, U.S. exports of goods rose to $299.6 billion, which is $50.5 billion or 20.3 percent more than in the first quarter of 2009.
How did Michigan’s companies fare in export growth in the first quarter of 2010, which in turn has a bearing on jobs and overall economic development in the state? Michigan ranked second in export growth among the 50 states during the first quarter of this year. Particularly, in comparison with the first quarter of 2009, foreign sales from Michigan’s companies, seasonally adjusted, increased by an annual rate of 58.1 percent.
On May 4, severe financial market turmoil started in the Euro Area — the 16-country group of the European Union that uses the euro as its common currency — that could hurt significantly future economic growth of its members. In addition, the crisis has intensified concerns about default risks among fiscally weak Euro Area member nations — Portugal, Ireland, Italy, Greece and Spain — thus contributing to a free fall in the euro, which resulted in a strengthening of the dollar.
How much do Michigan’s exporters depend upon the economic health of the Euro Area and the value of its currency? In the first three months of this year, $994.8 million of goods made in Michigan were sold to Euro Area buyers, which accounts for 9.3 percent of all state exports.
Evangelos Simos is chief economist of the consulting and research firm e-forecasting.com.